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the bold-acious new turkey jalapeño melt and buffalo chicken. subway. eat bold! her mom, a recent widow, had been having a tough time. then she started smiling again. >> she said, i'm just so excited. i just have this wonderful thing. >> an investment opportunity. >> you figured if your mother was set with it why not take a chance? >> yeah. >> she invested, too, but time went by and no returns. what did you think when your wife decided to mount her own investigation? >> well, i knew i couldn't stop her. >> working in secret, she'd unravel the truth. it was a big fraud.
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investors' cash used for simply unbelievable purposes. ♪ you know what to do >> to bank roll celebrity wanna-bes. >> it was a $3 million dress. >> would this daughter's decision to expose a scam mean selling out her own mom? >> they said to me, any investors can get in trouble. >> they could come after your mother at some point. >> a daughter's dilemma. h how painful was that? >> it was hard. >> burned by an offer too good to be true. good evening and welcome to "dateline." in most investment scams victims don't realize what's happened until it's too late but when the woman you'll meet tonight became suspicious about a financial opportunity she had heard about from her mother, she saw a chance to go from investor to investigat investigator. the problem was to help expose a multimillion dollar fraud this daughter would have to risk
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something far greater than money. ♪ >> becoming a pop superstar isn't easy. talent helps and looks never hurt. but short of winning "american idol" the best career move may be to find a wealthy sponsor to believes in your potential. someone with money to produce your first cd, follow your every move with cameras. >> and right now it's my new album. >> and hire an entourage to make you look good in the video. ♪ >> that was exactly the case for a handful of lucky hopefuls in los angeles. they had been signed to a record label that seemed to have no shortage of cash to lavish on its up and coming talent. >> they flew in core yog rafhoc from new york. >> i just thought he was filthy rich. >> as with just about everything you'll hear in this story, if it sounds too good to be true, well, it probably is. >> they're master manipulators.
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>> mom? >> kim and her family live a thousand miles away from those aspiring pop stars in l.a. the unlikely tale of how they are even remotely connected and of how a simple business venture threatened to pit a mother against a daughter begins back in 2003. at the time kim lived in montana with her husband, sons, and recently widowed mother. >> we had gone through a really rough fall as a family. >> a difficult time, kim says, because her step father had been killed in a car accident and her mother, debby, had shattered an ankle during a church retreat and needed lots of help. >> she is a wonderful grandmother and she's always been there for my children and her other grandchildren as well. >> after a few months under the same roof, kim and her husband, david, saw debby's spirits begin to lift, but at first they weren't sure exactly why.
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all they knew was she had been spending a lot of time on the phone, sometimes for hours a night. >> finally, david and i asked her, who are you talking to? and she just said, you know, i'm just so excited. you know, i just have this wonderful thing. >> so she was starting to pull out of this funk. yes. >> from losing her husband. >> yes. >> and the injury she had suffered. >> yes. >> that's a good thing. >> it was a good thing. we were just curious and so she said, kim and david, i can't explain it to you but if you want to know what's going on we'll set up a conference call. >> hello. >> can you guys hear me? >> do we have anybody else here? >> turns out kim's mother had been dialing into a conference call for updates on a financial investment she bought into. also on the line was another member of kim's family, a cousin kim calls aunt millie. >> yeah, henry? >> yes. >> this is millie. >> aunt millie had introduced kim's mother to tri energy, a company that owned coal mines and had investments in gold.
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kim and her husband agreed to hear the pitch. >> so we're like, okay. we're game to listen. >> first, i want to thank everyone for coming on tonight. what we are going to do is give you a presentation of our opportunity. >> they outlined a coal mining operation, you know, of which i knew nothing about coal mining. but throwing out numbers of tons this and tons that. >> we're looking at about 9 million tons of coal. >> tri energy representatives said that the company was about to make a killing with state-of-the-art clean coal. >> you don't have to worry about the toxic emission from the sulfur because it's under 1% sulfur. >> did they sound like they knew what they were talking about? >> they absolutely did. >> coal prices are $50 to $55 a ton. >> he seemed to have some data and know what he was talking about. >> the company just needed some cash to buy new mining equipment. they were told they'd double their money in 60 days.
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>> and that's one of the reasons why we're still going out and talking to friends and family and friends of friends. >> but there was much more to tri energy than making money, kim learned. once they were paid out, the investors, kim's mom included, planned to use a big chunk of their profits to launch charities around the globe. >> all of this in this group are about creating a new world. >> it was a good idea, endorsed by the company leaders. >> you can actually do this. >> you have just normal people that want to do good in the world and believe they have found a way to do that. >> and make money at the same time. >> tri energy seemed to be something rare -- a business with a soul. >> there was a lot of talk about religion, about faith, and about god. >> kim and her family are mo mormons but the investors cut across many faiths.
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>> it is an answer to prayer, god, and we are so thankful that you are directing the affairs, lord. >> this is bigger than all of us. this is god's project. he's providing and bringing us through. >> the opportunity struck a chord with kim's church going family. her sister invested $5,000, another cousin put in 10. there wasn't much time for the flannagans to think or do any research. >> they were basically saying to us that these deals were closing. >> so get in now. otherwise you'll miss this opportunity. >> that's right. and we really don't need any more funds for this to close but because of your relationship we're going to let you in. >> but at the time the flannagans didn't have much extra money to invest, so kim and david borrowed $10,000 from kim's mom who had just gotten a big life insurance payout. they wired it the next day. >> were you nervous about borrowing $10,000 from your mother-in-law to make this investment? >> i had access to funds in a 401(k) if i really got in a pinch and had to pay it back to her. we could have come up with it but it wouldn't have been easy.
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>> you figured if your mother was set with it, your aunt millie was set with it, if these guys were confident in it, why not take a chance? >> yeah. i mean, we thought, well, let's roll the dice and see what happens. >> kim and david took a gamble, but it wasn't long before they got a sinking feeling something wasn't right. >> you just can ask him whatever you'd like. >> where is the money? >> coming up, a vaguely queasy feeling becomes a harsh reality. >> we just said oh, we're going to owe my mom $10,000. >> when "too good to be true" continues. when you use lysol neutra air fabric mist. it kills 99.9% of bacteria on soft surfaces and eliminates odors at their source better than febreze. so now a fresh home is the sign of a healthy home. for tips on a healthy home, visit
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kim flannagan admits she and her husband didn't have much investing experience when they put ten grand into a mining operation called tri energy. did you have a lot of extra money to invest at that point in your life? >> no, definitely not. we were a fairly paycheck-to-paycheck family. >> but the deal came highly recommended by kim's own mother and the company seemed to be an open book updating its hundreds of investors with regular conference calls. >> you would dial into a number and you would listen to updates. >> so everything is starting to look very bright. >> like kim, most of the investors on the line had been recruited by family and friends. >> they got to know one another. people knew that my mom was a widow. >> we prayed for every member of this group. >> investor angelina encarnacion
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heard about the deal from kim's aunt millie. angelina once worked as a financial planner, and at the time was buying and selling real estate in northern california. how much did you initially invest? >> initially they only asked for 5,000. whatever wealth that's going to be accumulated out of this deal was supposed to be used for something good. >> as investors listened in they learned that tri energy had two executives on salary, one led the nightly call. >> bob, you want to tell a little bit of what we've got going now? >> the other also happened to be a pastor at a small church in california. and there was a third man they introduced to kim and the other investors. his name was dr. henry jones. the investors were told that dr. jones was already engaged in the kind of international good works they aspired to. he had a relationship with nelson mandela.
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and they said jones had important connections in the middle east. >> the prince of jordan and the head of jordanian intelligence. >> angelina remembers henry jones dropping in on the conference calls between meetings with very important people. >> let's see if henry is there. >> at some point he tried to reach him. he's a hard fellow to reach arngs wow, he is finally here. >> now you can really talk. say hello, henry. >> hi there. >> just such a busy person talking to the big guys, big players. >> the top ministers for the g-8 countries are meeting in europe. >> but what henry jones was doing with tri energy and how he fit into the coal mining business was a mystery to kim flannagan. >> they're supposed to get back to us before 9:00 a.m. our time with respect to whether or not the price was right. >> jones was apparently brokering a complex international gold transaction. >> some kind of gold transfer.
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>> transfer. >> yes. >> from where to where? >> i have absolutely no idea. >> you didn't get it. did they say in the conference call how much gold was suppose today be involved? >> a lot. >> a lot. yes. >> the deal was supposed to move 20,000 metric tons of gold from israel to a wealthy arab buyer. jones just needed cash for lawyers and banking fees. when the deal closed they said tri energy would make $200 million, enough money to expand its mining operation and pay out all the investors who could then launch those global charities. kim and her husband, david, however, were growing more than a little skeptical. >> they talked about the gold transfer and my initial response was, you know, no way. >> but the real test of faith came one night when kim dialed into the conference call and caught what sounded like an investor rebellion in progress. >> first of all, everybody, it's indicated that the transactions very much alive. >> a lie or alive?
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>> alive a-l-i-v-e. >> a few investors were questioning the legitimacy of the gold transaction. >> go ahead, everybody. just ask him, you know, whatever you'd like. >> where's the money? >> and now the flannagans' hasty investment gamble was seeming like a foolish bad bet. >> david and i looked at each other and we just said, we're going to owe my mom $10,000. >> but what happened next along with a choice kim flannagan made would put her mother and their relationship at risk. how painful was that? >> it was hard. >> what else was hard? facing the fact that her family was being ripped off and they weren't alone. >> it became not about my mother. it became about other people as well. d
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at first tri energy had looked like a win-win proposition, a lucrative return on investment with profits going to charity. >> there was a a lot of prayer. there was a lot of talk about this investment being diestically inspired. >> this is not a possession of mine. >> but to kim flannagan, the whole deal began to stink to high heaven. most of the investors were issued promissory notes guaranteeing a 2-1 return in 60 days. the payout would be even more if the gold deal closed before the promised date but for many investors the deadlines came and went. they were told there were problems at the coal mine and that cash was tied up in that international transaction. >> we were due payout. how come, you know, we're stalling here again?
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>> all i have to tell you is basically the deal will be complete. >> the company executives tried to reassure the skeptics. >> the kind of power and spirituality within the group, we cannot believe that we've all come together here like this not to emerge triumphant. >> but kim and her husband were now convinced that tri energy and the deal being brokered by dr. henry jones were a sham. >> it was a financial soap opera. >> so during that conference call when these investors revolted, that's when you thought, uh-oh. >> mm-hmm. >> we got taken. >> i just remember thinking, it kind of served us right. you know, and that it was naive and stupid. >> kim now saw that the investment story had been far fetched all along. the promised returns simply too good to be true and while most of the investors seemed to have their hearts in the right place, kim now wondered where their
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heads were. her own mother included. >> did you express your concerns to your mother? >> yes. >> and how did she respond? >> she didn't want to lose faith. she was still a believer. >> it was a difference of opinion that turned into a widening rift. kim was worried that her mother, who invested a total of $75,000, would pour all of her retirement money into tri energy. but her mom thought kim was being meddlesome and unsupportive. she moved out of kim's house and they saw each other less and less. did things get testy between the two of you? eventually, yes. >> kim says the simmering feud came to a head when even after voicing her doubts she learned her mother was pitching the scheme to friends at their church. >> i was at a church function and a mutual friend leaned over to me and she said your mom was talking to me about this investment opportunity. what do you think of it? >> and you said what?
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>> i said, don't touch it with a ten-foot pole. i didn't want anybody else to get involved. and i didn't know how to stop it. >> after that conversation at church, kim says she and her sister, who had also invested money, tried in ernest to convince their mother that tri energy was probably a scam. did you actually have to stage an intervention? >> yes. we tried. it was my sister and i and david. it didn't go well. >> what happened? >> my mom just wouldn't hear of it. it started a spiral in our relationship. >> but kim wasn't about to stand by and just watch as the company drained her mother's savings and lured in more innocent victims. >> i was angry. i kind of started a slow burn in my gut as i watched what was happening. >> looking for help, kim called the authorities in montana, who investigate financial fraud. but there wasn't much they could
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do. the company was operating outside the state's jurisdiction and kim didn't have any proof of wrongdoing other than a very good hunch. >> the authorities didn't have a lot of evidence to go off of. it was, you know, according to them very hard to just get involved and bring it down without some tangible evidence. so kim went on a mission to find some tangible evidence. >> kim's mission against tri energy began right back where it all started, on the phone. except now she was an interloper with a secret agenda. >> and i started listening in on conference calls and recording conversations. >> so you in effect began your own investigation. >> yes. >> but there was a complication. those state authorities had shared something with kim and that her moves to bring down tri energy could have serious consequences for her own family. >> they said to me any investors can get in trouble by offering
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it to other people. >> they could come after your mother at some point. >> yes, absolutely. >> but kim had chosen her path and there was no turning back. >> i worried about all the other people that continued to put in money if it didn't stop. it became not about my mother. it became about other people as well. >> kim didn't know where her investigation would lead. ♪ >> and completely in the dark about all of it were those wanna-be singers in l.a. how could they know that a woman in montana was about to help throw a serious wrench in their fledgling careers? coming up, kim flannagan's family plays hard ball with tri energy. what did your brother say? >> threatens. >> in what way? >> to go to the authorities unless they returned our money. >> when "too good to be true" continues.
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tri energy had been pitched to kim flannagan as a blessing but it had turned into a curse. not only was her mother pouring money into a business that kim thought was a scam, she was now recruiting other investors. >> i had to do something to help stop it. >> but to kim, the company was still nothing but a jumble of voices on the phone. to learn more she began secretly dialing into those nightly conference calls recording her mother and the other investors as they talked. >> did she have any idea you were recording all these conference calls? >> no, not at that time and she was not as much of a part of our lives as she had been before. >> kim took notes on the other potential victims and listened for clues about what the leaders were up to. >> i felt like i needed to find out who some of these people were. >> and how long did you record
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these conference calls? >> for months. it was an obsession. >> what did you think when your wife decided to mount her own investigation? >> well, i knew i couldn't stop her. >> as she recorded, kim heard what she thought was a masterful scam in progress. the henry jones deal grew more complex, with new fees to pay and world events to be concerned with you're talking a large amount of funds from the middle east. >> the investors were repeatedly told that a huge payout was around the corner. >> we're talking a couple days i would say and not weeks. >> and yet new people with new cash were being brought in. some by kim's own relatives. >> two people we met through millie. >> there were always new people. it was like a money making machine that just wasn't going to stop. >> these people were generally not wealthy folks. >> no.
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i think there's a lot of people that were older that had, you know, retirement accounts and, you know, once their money was already invested, they would recruit and invest more to secure their initial investment because it hadn't closed yet but it was always so close, just around the corner, just a little bit more and it'll be done. they're master manipulators. >> investor angelina encarnacion was fully caught up in that financial rollercoaster ride. her initial $5,000 commitment snowballed. how much did you invest? >> about $200,000. >> $200,000. >> yes. >> that was a little hard for you to say there. >> yes. >> with so much money flowing into tri energy, kim and her siblings thought they should try to get their own money out. they got on the phone with the company leaders and decided to play hardball.
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kim recorded the call while her brother, shawn, a certified accountant, grilled the tri energy executives about what dr. henry jones was up to. >> dr. henry jones, is he acting as the broker in this whole deal? yes. >> what did your brother say? >> threatens. >> in what way? >> to go to the authorities unless they returned our money. >> is he licensed through the national association and the cfdc? >> i don't, you know, what we'd like you guys to do is just submit everything to us in writing. >> it's a simple question. >> i think if it's not in their bank accounts tomorrow i think i'm going to go chat with the state. >> that threat got a swift reaction. and not the kind you'd expect from a company that had nothing to hide. if that money is returned to you gu guys -- >> you got the money? >> yes. >> and you reported them anyway. >> i made no such promise. >> kim thought she now had
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something authorities could work with. she turned all her tapes including that incriminating call over to state regulators who by now were in touch with federal investigators at the securities and exchange commission. in may of 2005 the s.e.c. cracked down on tri energy, freezing the assets of the company and of dr. henry jones. >> we investigated this thoroughly and there was no evidence that anything these people were saying was true. >> steven coen is a lead trial attorney with the s.e.c. he says that kim flannagan wasn't the only investor to complain about tri energy, but she was the most aggressive. a federal investigation had, in fact, been under way, and the s.e.c. says the case had all the hallmarks of a classic ponzi scheme. >> if someone is telling you they can get you huge returns that you can't get anywhere else, it's not true. >> coen says the leaders were using a common ploy, gathering like minded people in order to
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further the con. >> the kind of power and spirituality within the group. >> it's called affinity fraud. what might seem outlandish or unbelievable is more believable when somebody you know and trust comes to you. what's really egregious about this case is how far the people went playing the religion card. >> and the affinity con worked on the tri energy victims just as it worked in the biggest ponzi scheme in history, bernie madoff's. his scheme targeted jewish investors who in turn spread the word among family and friends. investigators say that while tens of millions had poured through tri energy, the true cost of this fraud can't be measured in dollars and cents. >> some time toward the end of the scheme there was an investor who committed suicide. it was close in time to this person discovering that tri energy was really just a big fraud. >> kim later learned that the
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investor who committed suicide had also recruited friends and family into the scheme, the very cycle she had been so desperate to stop. the guilt that you would feel knowing that you were responsible for bringing those individuals and possibly even draining them financially. that's an awesome responsibility. >> investigators were now on the case trying to answer the most pressing questions of all. where was the money? and where was dr. henry jones? coming up, dr. henry jones looking less like a friend of mandela and more like a jay-z wanna-be. >> it was like they're performing at this place, a photo shoot, we're doing a video tomorrow. >> when "dateline" continues. mary: does this dress make my backside look big? abe: perhaps...
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>> that's what my son woke up to with his alarm clock that morning, his grandma's name on the radio. >> what did you tell your son? >> that grandma was making some bad decisions. >> in a civil suit the s.e.c. accused mildred stultz the cousin called aunt millie of participating in the fraud by recruiting investors. members of a family once so close were now barely speaking. but what about the money kim's mother and so many people had poured into the scheme? fbi agent craig mason and federal prosecutor ruth pinkel joined the s.e.c. in trying to untangle the fraud. >> it's very complicated. they do it on purpose because they don't want you to understand what's going on. >> investigators discovered tri energy did have a coal mine in kentucky but it was no state-of-the-art clean coal facility. far from it. so there was one coal mine but it really was just a hole in the
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ground. >> correct. >> it wasn't producing. >> correct. >> the feds say that gold transaction was on its face absurd. the deal supposedly involved 20,000 metric tons of gold but that is nearly five times all the gold in fort knox. was there a gold deal in the middle east? >> as far as the evidence showed there was no gold deal. >> in all, federal investigators tracked 32.5 million dollars from tri energy investors. they say the two company executives together paid themselves more than $800,000 over three and a half years. some money did go into running the coal mine and a good chunk was used to pay back early investors, but investigators say the overwhelming majority of the cash, more than $21 million went straight to dr. henry jones the international humanitarian diplomat and media mogul?
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that's right. the same dr. jones was said to travel the world brokering complex deals was also playing the part of a hollywood entrepreneur, producing movies and music video. we found his credit on dozens of clips. >> well, well, well. >> here he is making a cameo in a music video he directed. >> she'll be singing about it. >> and this is a movie henry jones made starring martin sheen's brother joe estevez. >> just scouring the neighborhood seeing if anybody was up to no good. >> he talks about a relationship with nelson mandela. all of these charities that he's involved in. was any of that true as far as you could tell? >> we found no evidence that any of these things were true. >> all lies. >> all lies. >> the truth was that jones spent most of his time and money supporting a handful of unknown artists at an entertainment company he called m.i.g.
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records. >> m.i.g. records presents six new artists. >> rappers, pop singers, even a duo featuring his own wife, a russian fashion model. that's her posing in a diamond-covered dress. >> it was a $3 million dress. >> $3 million dress. >> it was a very different world than what was presented to the investors on the conference calls. >> dr. jones seemed to enjoy hanging out with famous ex-cons. madame heidi fleiss turned up in a rap video. that's mike tyson boxing with jones' wife. >> versace. >> carlos is a freelance hollywood fashion stylist. he dressed the singers at jones' label for more than two years. >> he had me so busy from when i first met him it was like they're going to this state and performing at this place. this one needs a new photo shoot. we're doing a video tomorrow. >> did he seem like a big-time record promoter, talent promoter? >> he was charming and funny. he had a big entourage around him. >> carlos says he ran his
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business like an empire. there were fancy cars for jones and his favorite singers, $10,000 a day shopping sprees in beverly hills. not to mention the generous budgets for tours and video production. >> it was always done well. he was never cheap on any of that ever. >> it was a good gig especially for the singers some of whom may have had potential. others -- ♪ it's a mystery to me >> did you ever think to yourself, wow, this guy is pumping a a lot of money into people who just aren't that talented. >> yes, every day i worked with him. i thought he was filthy rich. who am i to question where his money comes from? >> investigators say they know where the money came from and it wasn't record sales. in fact, they say jones had to pay clubs to let his artists perform not the other way around. >> we found none of the albums were selling and it didn't appear people were willing to pay for these people to perform. >> the fact is his business made no money so everybody who got
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paid, every lunch that was paid for, every dinner, every music video was paid for with money from investors. >> the singer jones seemed to have lavished the most money on was this woman, adrian, who he dubbed the chinese britney spears. here she is acapella in a clip we found. ♪ if you're looking for a girl who's looking for a guy you know what to do ♪ >> she got the most elaborate music videos and a billboard on the sunset strip. jones even filmed a reality show about her fledgling career. >> i met dr. henry jones. he offered me a record deal. >> all of it funded bai yun knowing investors like kim's mother and angelina encarnacion. >> the money was spent on billboards promoting her.
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>> it's terrible. >> while he was making music and movies, jones divorced his russian wife. that's apparently when singer adrian lao took center stage. she's widely been described as henry jones' girlfriend. does that seem consistent with what you witnessed? >> either she had a personal relationship with dr. henry jones or maybe he believed she was really talented. >> or according to investigators maybe she was a pawn in his scheme. >> henry jones was using her as a conduit to funnel money to keep the scheme alive. >> at a certain point henry jones instructed people to send money to her. >> under the guise of what? >> that she was supposedly his attorney and he needed money for attorney's fees. >> federal prosecutors thought that they had strong evidence to prove fraud. while they had been building their case, jones left los angeles and headed west.
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>> we're outside lax and right now promoting my new album. >> jones was arrested on an interpol warrant in hong kong in the summer of 2007. he was brought back to l.a. to face charges with the two tri energy executives. soon a jury would hear his side of the story. and so would we. hello,
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the tri energy fiasco had already shattered kim flannagan's relationship with her mother. ♪ everybody up now up now >> but until our interview, she and her husband hadn't seen what the government says henry jones did with $21 million of investors' money.
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so we showed them an example of dr. jones' work. >> it makes me a little sick. not something you'd invest in. >> no. >> and probably not something the other investors would want to get involved in. >> not something i'd even let in my house. it's an awfully long way from humanitarian projects. >> henry jones and the two tri energy executives were indicted on charges of securities, mail, and wire fraud. in their defense, the company executives say they were victims, too, duped by henry jones. one pleaded guilty to a single count of fraud and got nine years in prison. the other was convicted at trial and is serving 12 years while he appeals. while jones, accused of bilking hundreds of investors out of millions of dollars, took the stand and insisted that the gold transaction had, in fact, been real. in court, prosecutors told jurors about the music business jones ran with investors' money.
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angelina encarnacion who had hoped to do some good in the world, was called to testify. angelina lost her home as a result of her $200,000 investment. >> i have to move on but i still suffer the consequences of that experience. it's a very, very painful experience. >> dr. henry jones, is he acting as the broker in this whole deal? the jury also heard hours of investor conference calls, many recorded by kim flannagan. >> all i have to tell you is basically the deal will be complete. >> in the end, henry jones was convicted of fraud and sentenced to 20 years in the federal prison in california. that's where we caught up with him on the phone. >> hello. >> hello, mr. jones. how are you today? we didn't know which henry jones to expect -- the international diplomat or the hollywood media mogul. turns out he admitted to being a little of both.
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he didn't deny spending cash from investors on his entertainment business, but told us it was part of a legitimate deal he had with one of the tri energy executives. >> my contract was she would underwrite my movie and music endeavors in exchange for my setting up international markets for coal. >> jones says he calls himself "doctor" because he has a ph.d in business from kensington university in california. our research found that kensington was shut down for selling bogus graduate degrees in 2003. some people would consider that a diploma mill. >> most of the world's accomplished people never saw the four walls of a university, shakespeare for instance. >> what jones really wanted to tell us about was a film he had produced about the invasion of iraq. he claims it's the real reason
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he's behind bars. so you're saying that the government didn't like your documentary, "the rise and fall of saddam hussein" and that's why you were prosecuted? >> i do believe, yes. and this is my theory. >> he also talked about his friendships in washington and in governments around the globe. if we were to contact these people, would they confirm that you know them, that you've had dealings with them? >> well, the best confirmation would be from president clinton's director of intelligence. >> james woolsey told "dateline" he's never heard of henry jones. as for the allegation that he used singer adrian lao's bank account as part of the fraud, jones says that was an innocent mistake. lao wasn't charged with violating the law but agreed with the s.e.c. to turn over more than $200,000 to a fund that will go to investors. she declined our requests for
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comment but her website says she is working on a new album and was recently photographed outside the grammy awards. finally, those audiotapes that helped send jones to prison? he claims they might have been tampered with by the fbi. >> my trial was based on tapes that were doctored. my voice sounded -- >> doctored? you're saying the tapes were doctored? >> yes! >> the fact of the matter is, mr. jones, you would get on these conference calls and talk about this gold deal. the evidence shows that in fact there was no gold deal. that you were lying the entire time. >> well -- >> in order to get money out of these people. >> with all due respect even if i was arrested in china i was still trying to bring cloesh tocloesh -- closure to the gold transaction. >> henry jones has fired his defense attorney and is filing his own appeal. throughout our conversation he insisted he is an innocent man
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wrongly accused. what do you say to henry jones today? >> you are where you should be. and that's serving time. >> kim's relative millie stultz settled her civil case with the s.e.c. without admitting wrongdoing and while she was ordered to pay money to a victim's fund the court found that millie had been wiped out by the scheme. as for kim's mother, debby loveless, in the end the government saw her more as a victim than as a perpetrator. she, also, settled her case with the state of montana without admitting any wrongdoing and by agreeing to stay out of the investment business. and kim and david have paid her back that $10,000 loan. >> i knew in my heart that although my mom had disagreed with me that she raised me to choose right and i knew what i had done was good. >> kim's mother didn't want to be interviewed on camera but she told us that the worst part of the investment saga was what it
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did to her family relationships. her daughter couldn't agree more. >> the saddest thing for me was the time that i lost with my mom. the relationship that was so strained for so long. >> today their bond is on the mend and kim's mother is back in her grand children's' lives. >> we don't talk about tri energy. that's still kind of an off limits thing in our relationship. so it's hard. i know that she loves me. i know she knows that i love her. >> kim and her family found out the hard way that things aren't always what they seem. >> when it comes to investing, anything financial, be skeptical. especially of family and friends. >> but it's not too late for those who trusted tri energy to get a little bit of their money back. the government and a court-appointed receiver have recovered close to a million dollars that will be returned to
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investors, possibly by the end of this year. that's all for now. for all of us at nbc news, thanks for joining us. this sunday from new york, a special edition of "meet the press." this morning, we kick off a week-long commitment at nbc news to "education nation." we will try to cut to the core of the crisis in public education. this weekend's opening of the emotional documentary, "waiting for superman" is a powerful reminder that too many schools are failing our children, and america's competitiveness is suffering as a result. are resources the answer? facebook founder mark zuckerburg announced he'll donate $100 million to newark, new jersey's schools. how do we make sure the best teachers are in the classroom?
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what reforms are working? and what can each one of us do to help? our discussion with around duncan, leading reformer and chancellor of washington, d.c. schools, michelle rhee, randi weingarten, president of the federation of teachers. and robert bobb, emergency financial manager of detroit and robert bobb, emergency financial manager of detroit public schools. captions paid for by nbc-universal television 0. but first, to politics and the divided congress. what will republicans do in power? this week, republican leaders in the house unveiled their pledge to america, campaign manifesto that's the 2010 version of the gop's contract with america from 1994. the highlights -- extend the bush tax cuts, cut spending, and repeal health care reform. >> our pledge
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